The Programme for Partnership Government contains a commitment that budget measures will be introduced that will involve at least a 2:1 split between public spending and tax reductions. This commitment is also contained in the confidence and supply agreement with Fianna Fáil. However, the actual ratio of spending increases to tax reductions in Budget 2017 was over 3:1. So we can probably expect a bigger proporton of Tax cuts in Budget 2018.
According to Finance Minister Noonan – the recent drops in tax revenues , compared to forecasts , should not impact on the adjustments to be made in Budget 2018 . He said “Although tax revenue for the first four months of the year are slightly behind expectations, it will not impact on the fiscal space available for Budget 2018 as the fiscal rules provide for expenditure growth, net of discretionary revenue measures, to be based on the trend growth rate rather than revenue buoyancy, whether negative or positive.”
Overall adjustments in Budget 2018 are expected to be € 1.2 Billion Euro – so we can expect about €400 Million Euro worth of tax cuts (including USC).
Of course these estimates may be adjusted during the summer. We should know a bit more after the National Economic Dialogue at the end of June.
The full details of Budget 2018 will be revealed on October 10th 2017. See more about Budget 2018 Epectations Here